Correlation Between Electronic Arts and Bumrungrad Hospital
Can any of the company-specific risk be diversified away by investing in both Electronic Arts and Bumrungrad Hospital at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Electronic Arts and Bumrungrad Hospital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Electronic Arts and Bumrungrad Hospital Public, you can compare the effects of market volatilities on Electronic Arts and Bumrungrad Hospital and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Electronic Arts with a short position of Bumrungrad Hospital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Electronic Arts and Bumrungrad Hospital.
Diversification Opportunities for Electronic Arts and Bumrungrad Hospital
-0.83 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Electronic and Bumrungrad is -0.83. Overlapping area represents the amount of risk that can be diversified away by holding Electronic Arts and Bumrungrad Hospital Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bumrungrad Hospital and Electronic Arts is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Electronic Arts are associated (or correlated) with Bumrungrad Hospital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bumrungrad Hospital has no effect on the direction of Electronic Arts i.e., Electronic Arts and Bumrungrad Hospital go up and down completely randomly.
Pair Corralation between Electronic Arts and Bumrungrad Hospital
Assuming the 90 days trading horizon Electronic Arts is expected to generate 0.36 times more return on investment than Bumrungrad Hospital. However, Electronic Arts is 2.78 times less risky than Bumrungrad Hospital. It trades about 0.46 of its potential returns per unit of risk. Bumrungrad Hospital Public is currently generating about -0.22 per unit of risk. If you would invest 12,890 in Electronic Arts on August 30, 2024 and sell it today you would earn a total of 2,843 from holding Electronic Arts or generate 22.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Electronic Arts vs. Bumrungrad Hospital Public
Performance |
| Timeline |
| Electronic Arts |
| Bumrungrad Hospital |
Electronic Arts and Bumrungrad Hospital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Electronic Arts and Bumrungrad Hospital
The main advantage of trading using opposite Electronic Arts and Bumrungrad Hospital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Electronic Arts position performs unexpectedly, Bumrungrad Hospital can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Bumrungrad Hospital will offset losses from the drop in Bumrungrad Hospital's long position.| Electronic Arts vs. Apple Inc | Electronic Arts vs. Apple Inc | Electronic Arts vs. Superior Plus Corp | Electronic Arts vs. SIVERS SEMICONDUCTORS AB |
| Bumrungrad Hospital vs. Richter Gedeon Vegyszeti | Bumrungrad Hospital vs. Charoen Pokphand Foods | Bumrungrad Hospital vs. Superior Plus Corp | Bumrungrad Hospital vs. NMI Holdings |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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